Over 1000 Tech Startups Added in 2017, Rapid Rise in B2B Segment

TL;DR – India added about 1,000 technology startups in 2017, taking their total to 5,200 = Third largest startup ecosystem

India added about 1,000 technology startups in 2017, retaining its position as the third largest hub for entrepreneurship, IT apex body Nasscom said on Thursday. “About 1,000 tech startups were registered this year (2017), taking their total to 5,200 and making India the world’s third largest start-up ecosystem,” said Nasscom Chairman Raman Roy here at an event.

Releasing a joint report on the ‘Indian Start-up Ecosystem – Traversing the maturity cycle’, at the ninth annual edition of Nasscom Product Conclave, Roy said despite tough competition from Britain and Israel, India retained its
momentum as a vibrant landscape for startups. “Bengaluru, Delhi/NCR and Mumbai retained their position as the key start-up hubs, with 20 percent of the startups emerging from tier-2 and tier-3 cities across the country,” Roy said.

He cited the report Nasscom compiled with city-based research, consulting and advisory firm Zinnov. Among the verticals, health-tech, fin-tech and e-commerce have seen a rapid rise in the B2B (business-to-business) segment, signifying maturing growth. “The Indian IT industry is renowned for pioneering innovation and the startups arena is no different. Our country is one of the fastest growing start-up landscapes, with the participation of every major accelerator, investor and angel group from the world over,” Roy said.

Noting that the ecosystem was ripe for healthy growth through verticals and innovative business model, Roy said the Indian landscape was brimming with innovative ideas, which need guidance to accelerate, scale-up and funding.
“With 40 percent of startups in the B2B segment, its share in the tech start-up funding is 30 percent, thanks to corporates, which are supporting them with 50 collaboration programmes, 20 accelerators and 40 investors,” said Roy. Fin-tech start-up base is about 360, indicating 31 percent annual growth, with $200-million funding in the first half of this year, recording a whopping 135 percent annual growth.

“Sub-segments like digital payments and lending are maturing, while wealth management and insurance-tech emerging as growth areas. Implementation of advanced technology are also becoming prominent, with 33 percent fintech funding towards advanced technologies like Artificial Intelligence (AI) and analytics,” said Roy. Similarly, health-based technology startups are 320, with 28 percent annual growth and attracted $160-million funding in the April-September period, which is an increase of 129 percent in the same period of 2016.

“With 60 percent startups, the B2C (business-to-customer) segment is focused on creating innovative business models and taking the vertical approach, securing about 70 percent funding in the year’s first half,” said Roy, also Chief Executive Officer of Quatrro Global Services, on the occasion. Observing that the ecosystem was driven by young, diverse and inclusive entrepreneurs, Nasscom President R.Chandrashekhar said the landscape was leading to focused domain solutions in verticals like healthcare, agriculture and education.

“Findings of the report is a testimony to the potential of the start-up landscape and the scope of growth and opportunity that India presents.”We will continue its drive towards catalysing tech startups, build category leaders and support startups to create for India,” said the former Telecom Secretary.

Growing at five-year CAGR of 30 percent, advanced startups are focused on creating solutions in Artificial Intelligence, Analytics, Augmented Reality, Virtual reality, Blockchain and Internet of Things. Enterprise and SMB (small and medium businesses) focused startups, which are SaaS (software as a service) are also getting venture funds.

With 167 percent growth, funding of the start-up ecosystem led by unicorns stood at $6.4 billion till September.